26 Aug Psychological Aspects of Estate Planning

As Benjamin Franklin wisely observed in 1789, “…in this world, nothing can be said to be certain, except death and taxes.”

While few of us relish confronting either, estate planning is a necessary process designed to address both. However, estate planning goes beyond the mere allocation of assets. It involves addressing the psychological hurdles that may prevent clients from engaging in the planning process and ensuring that the estate plan aligns with the client’s comprehensive needs, rather than focusing solely on tax considerations.

From a client’s standpoint, it is common to avoid uncomfortable topics or feel overwhelmed by complexities they don’t fully grasp. Several psychological barriers can hinder effective estate planning:

• Fear that planning may somehow hasten death.
• Difficulty in selecting a power of attorney, executor, or successor trustee.
• Procrastination in gathering required documents.
• Reluctance to confront end-of-life medical decisions.
• Stress from handling a parent’s estate.
• Perception that hiring an attorney is unnecessary or too costly when online alternatives exist.

Some attorneys might avoid these psychological aspects, focusing strictly on legal matters. However, a proficient estate planning attorney understands that family dynamics play a crucial role and that establishing clear communication with the client is vital. The goal is to enhance both the planning experience and its ultimate effectiveness. Working closely with your financial advisor will help you answer many questions the attorney will ask you.

Attorneys must recognize and address these issues by educating their clients on key points:

• Serving as an executor is a responsibility, not just an honor.
• Naming multiple co-executors can exacerbate family tensions if the children don’t get along.
• Without a will, the state’s default distribution plan may not align with the client’s wishes.
• Divorce doesn’t automatically update beneficiary designations on retirement accounts.
• Without a will, children from a prior marriage might inherit a significant portion of the estate.
• Sometimes, a corporate trustee is a more impartial and effective choice than a single heir.
• Strategies exist to protect a disabled heir’s eligibility for public benefits without disinheriting them.
• Fair treatment among heirs may differ from equal treatment.
• Safeguarding against a surviving spouse depleting assets intended for other heirs.
• A terminal illness diagnosis necessitates specialized planning.
• Unique considerations for family businesses, especially when not all heirs are involved.

Attorneys must delve deeply into these issues, offering clear, jargon-free explanations, potentially even using visual aids to clarify complex concepts. A well-constructed estate planning questionnaire can help surface family dynamics and prepare the client for these important discussions. Ultimately, a successful estate plan results in a sense of relief that all pertinent issues have been addressed, (not just in a set of signed documents) with tailored solutions integrated into the plan.

(Credit to Dominion Law Group, LLP for content) No information contained in this content shall be construed as legal counsel. If you need legal advise, please contact an attorney.